Wong Chuk Hang, a neighbourhood of leafy streets and old industrial buildings close to Hong Kong’s Ocean Park theme park, is poised to become the kind of upscale residential location more akin to downtown Central, after two of the city’s biggest home builders secured a parcel of land.

Kerry Properties and Sino Land have won the tender from subway operator MTR Corp for the 600-home site adjacent to the Wong Chuk Hang MTR station on the south side of Hong Kong Island.

The developers did not disclose the price and total investment cost, but analysts estimated that homes built on the site could be sold at more than HK$30,000 per square foot, or at least HK$15 million (US$1.9 million) for a 500 sq ft, two-bedroom unit, when they are completed by 2023.

A four-bedroom unit could be worth more than HK$30 million, comparable to flats sold in the city’s traditional luxury residential districts.

“(Wong Chuk Hang) will be turned into a new upmarket residential district. It is gradually shedding its image as an industrial area, with restaurants, hotels and shopping destinations popping up where they was previously a lack of new supply,” said Chu Ip-pui, an executive director of Kerry Real Estate Agency, a unit of Kerry Properties.

The estimate of high prices comes as Chief Executive Carrie Lam Cheng Yuet-ngor looks to address the city’s soaring housing costs by seeking to increase land supply. Hong Kong is now one of the world’s least affordable urban areas in which to buy a property.

The project on the 92,269 square foot Wong Chuk Hang site, the second phase of development in the area, is expected to deliver two residential towers, offering a total of about 600 residential units. When completed, the project will generate a buildable gross floor area of about 492,991 square feet.

James Cheung, an executive director at Centaline Surveyors, said the total investment for the phase two development would be around HK$10 billion, or about HK$20,000 per square foot, taking into account the land premium of HK$5.2 billion or HK$10,575 per square foot.

“The selling price [of the flats] will be more than HK$30,000 per square foot,” said Cheung.

Under the plan by MTR Corp, the entire residential property development around Wong Chuk Hang station will comprise 14 blocks with about 4,700 flats, as well as a commercial element of more than 500,000 square feet.

MTR Corp received 10 bids when the tender closed on December 1. Hong Kong bidders included Sun Hung Kai Properties, Cheung Kong Property (Holdings), Henderson Land Development, New World Development, Great Eagle Holdings, Wheelock Properties and Chinachem Group. China Resources Land was the only mainland Chinese developer to submit a bid.

The line-up is a stark contrast from a year ago, when developers from north of the border dominated Hong Kong’s land auctions and tenders, often paying substantially above market valuations to grab land. Their investments have slowed since August, due largely to Beijing’s regulatory clampdown on asset acquisitions outside the mainland.

MTR Corp sold the first phase of the development in February to a joint venture between China’s Ping An Real Estate Capital and Hong Kong’s Road King Infrastructure for an estimated HK$8 billion to HK$9.8 billion.